Why the CFPB’s Guidance on Unfair Practices Will Keep Giving Banks Trouble

American Banker, Nov. 9, 2022–Kate Berry (subscription)
Bankers claim that the CFPB issued non-binding guidance on so-called “unfair” bank fees and that the White House released a statement on the same day claiming the bureau’s actions were settled law. The CFPB’s novel approach to UDAAP has already been challenged in court by bank trade groups for exceeding the agency’s authority and failing to adhere to the public rulemaking process. Now financial firms are facing higher costs plus legal and compliance risks if they fail to comply with guidance that no court has yet determined to be legal.